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|Nawaplastic's business decision takes the market by shock (Illustration image)|
Notably, both Binh Minh Plastic (BMP) and Tien Phong Plastic (NTP) have built themselves empires. While NTP’s products are covering the northern market, BMP’s products are popular in the south. However, Nawaplastic plans to increase its holdings in BMP, while divesting its entire holdings in NTP.
The move took the market by surprise, as both investments brought massive profit. Besides, Nawaplastic has been repeatedly announcing its intention to increase its holdings in NTP.
Notably, in the 2012-2013 period, Nawaplastic spent VND487 billion ($21.3 million) buying 10.33 million NTP shares to become the second-largest shareholder with 20.82 per cent, following State Capital Investment Corporation (SCIC) with 37.1 per cent. After receiving dividend via stocks, the Thai firm currently holds 21.27 million shares in NTP.
NTP’s stock is valued at VND69,000 ($3.03) on the transaction session of September 21, meaning these 21.27 million shares are worth VND1.47 trillion ($64.4 million), tripling Nawaplastic’s initial investment capital. Besides, Nawaplastic acquired VND173 billion ($7.58 million) in dividend paid by cash during the past five years.
Regarding BMP, in 2012, Nawaplastic also spent VND352 billion ($15.4 million) purchasing 7.13 million ordinary BMP shares, representing 20.4 per cent of the chartered capital. Also, after being paid dividend via stocks, the Thai firm currently holds 16.7 million BMP shares.
On the September 21 transaction session, BMP’s stock were valued at VND79,000 ($3.46), thus 16.7 million shares are worth VND1.32 trillion ($57.8 million), nearly four times higher than the Nawaplastic’s initial investment in BMP. Furthermore, the Thai firm also earned VND193 billion ($8.46 million) from dividend via cash during the past five years.
The decision comes as even more of a surprise as both BMP and NTP approved the plan to lift its foreign ownership limit (FOL) to 100 per cent. However, Nawaplastic only chose to increase its holding in BMP and simultaneously leave NTP.
Notably, a BMP representative recently revealed that Nawaplastic showed interest in raising its holdings in the company by purchasing SCIC’s stocks that will be divested.
Currently, SCIC is the biggest shareholder of BMP with more than 24 million shares, an equivalent of 29.5 per cent. It is also expected that along with expanding the FOL, the state divestment from BMP will lure in many foreign investors, along with Nawaplastic.
Meanwhile, on September 20, Nawaplastic submitted a document to the State Securities Commission of Vietnam (SSC) and the Hanoi Stock Exchange (HNX) to notify them of its plan to divest its entire 21.27 million shares, equaling 23.84 per cent of the chartered capital, from NTP, aiming to restructure its portfolio.
The transaction is expected to occur between September 25 and October 20 this year through the matching or put-through model.
Nawaplastic, a wholly-owned subsidiary of Thai Plastic and Chemicals PCL (TPC), specialises in manufacturing and distributing PVC plastic.
TPC, which is a 90 per cent owned subsidiary of SCG, currently holds 50 per cent of the Thai plastic market, while simultaneously owning numerous domestic plastic manufacturing companies, including Chemteck Co., Ltd. (100 per cent), Viet-Thai Plastchem Co., Ltd. (72.49 per cent), and TPC Vina Plastic and Chemicals Corporation Limited (70 per cent).
Through M&A with BMP and NTP, Nawaplastic will take the existing advantages in terms of manufacturing and distribution systems as well as their brands to realise SCG and Nawaplastic’s targets to control the construction material market in Vietnam.
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